Industrial Finance

Corporation of India
Introduction
 IFCI’s full form is Industrial Finance Corporation of India,  founded as a
Statutory Corporation in 1948 to offer medium- and lengthy finance to
industries.

 IFCI became a Public Limited Company under the Companies Act of 1956
when the IFC Act was repealed in the year of1993. IFCI is currently a
government-owned corporation, with the Indian government owning 61.02 %
of the company’s paid-up capital.

 IFCI is also a recognised Public Financial Institution under Section 2(72) of the
Companies Act in 2013 and is registered as a Systemically Important Non-
Deposit Taking Non-Banking Finance Company with the Reserve Bank of India
(RBI).
Indian capital markets were somewhat underdeveloped at the time of independence in 1947. The need for capital was fast
increasing, yet capital sources were scarce. The commercial banks that existed at the time were not well-positioned to meet
long-term capital demands in any substantial way. The Industrial Finance Corporation of India (IFCI) was created on July 1,
1948, by adopting the IFC Act 1948 in response to this backdrop and to bridge the demand-supply gap for capital needs in
the sector.

IFCI’s full form is the Industrial Finance Corporation of India, India’s first Development Financial Institution, established to
promote economic growth through infrastructure and industry development. Since then, IFCI has made substantial
contributions to the economy through its unwavering support for initiatives in manufacturing, infrastructure, services, and
agriculture-related industries. The Indian Capital Markets and Financial System saw considerable changes after the Indian
economy was liberalized in 1991. The constitution of IFCI was converted from a statutory corporation to a company under
the Indian Companies Act, 1956, to facilitate raising funds directly through capital markets. The company’s name was
subsequently changed to ‘IFCI Limited’ in October 1999.
Vision
To be the leading development institution for industrial and infrastructure sectors across the spectrum and be an
influential partner in country’s economic growth and development.

Mission
To adopt the best practices in financing industry and infrastructure and leverage core competencies in promoting
sustainable industrial and infrastructure development in the country. To act as a competitive, client friendly and
development oriented organization delivering financial products and services to the satisfaction of all
stakeholders.

 
Values

 Zeal to excel and zest for change

 Integrity and fairness in all matters 

 Respect for dignity and potential of individuals

 Strict adherence to commitments 

 Ensure speed of response 

 Foster learning, creativity and teamwork

 Loyalty and pride in IFCI

OVERVIEW OF IFCI 70 YEAR JOURNEY IN INDIAN ECONOMY
TODAY – GOI
infused equity
2020 – GOI of Rs.200
infused equity crore in
2018 – GOI of Rs.200 March, 2021.
infused equity crore in Stake has now
2015 – ₹100 crore in March, increased to
Became a March 2018. Stake 2020.
2006-07 – 63.81%.
Government Stake increased to
Earned net Company with increased to
2001-02 – Deep 61.02% during
profits Government 56.42% during
restructuring of six years. afte
Did the year.
1993 holding of the year.
liabilities & not ravail
– Govt. support ₹2378 crore of
1948 – Set up public 51.04% in
Becamelimited was provided to grant
as India’s first company and capital.
a come out of approved
DFI was Listed on the economic GOI
by for 2007-
the Stock recession
of late 1990s.
08 onwards.
Exchanges

Contribution to
Manufacturing, Infrastructure & Services Sector Financing Economy

Managing Govt.
Govt. Schemes & Funds Management Schemes/Initiatives

Institutional Building of Capital & Financial Market Intermediaries, Social Institutional &
Capacity Building
Welfare andEducation 3
3
 IFCI GROUP STRUCTURE
IFCI Ltd
(63.81% Equity
Shares held by GOI)

Stock Holding IFCI Venture Capital IFCI

IFCI Financial Services Ltd IFCI Factors Ltd MPCON Ltd
Corporation of India Ltd Funds Ltd Infrastructure
(94.78%) (99.90%) Development Ltd (79.72%)
(52.86%) (98.59%)
(100%)

Stock Holding Document

IFIN Commodities Ltd Management Solution IIDL Realtors Pvt Ltd
(Commodity Trading) Ltd (Owns real estate assets)

IFIN Security Finance Ltd SHCIL Services Ltd

(NBFC) (Broking Social Initiatives:
Services) • IFCI Social Foundation (ISF)
• Institute of Leadership Development (ILD)
Stock Holding Securities • Management Development Institute (MDI) - Gurgaon & Murshidabad
IFIN Credit Ltd
IFSC Ltd • Rashtriya Gramin Vikas Nidhi (RGVN)
(Operations in GIFT city)

4
CONTRIBUTION OF
IFCI TO THE
NATION
OPERATIONAL PERFORMANCE: KEY HIGHLIGHTS

Improvement in Quality of Loan Portfolio

Intense focus on recovery from NPAs &

Divestment of Non-core assets

Focus on enhancing fee based advisory

business

Strategic alignment of business processes

with markets and regulations

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Functions
 The IFCI bank’s main goal is to provide medium-fast loans and advances to industrial and
manufacturing enterprises
 Before making any loans, it considers several variables
 They research the significance of the industry in our country’s economy, the project’s overall
cost, and, eventually, the service performance and administration
 If the results of the above factors are satisfactory, the IFCI will approve the loan
 The IFCI bank can also invest in these companies’ debentures on the market
 The IFCI bank also backs up these industrial enterprises’ loans
 The Industrial Finance Corporation of India might choose to underwrite securities when a
company issues shares or debentures
 It also ensures deferred payments on loans taken out in foreign currency from foreign banks
 The Allied Services and Merchant Banking Department is a separate division. They handle issues
including capital restructuring, loan syndication, mergers and acquisitions
 The Industrial Finance Corporation of India has promoted three subsidiaries to boost industrial
growth: IFCI Financial Services Ltd, IFCI Insurance and Services Ltd
 It is responsible for the operation and regulation of these three companies
Financial Products
Loan Products:
IFCI Ltd., established as the Industrial Finance Corporation of India (IFCI) on July 1, 1948, was the first Development Financial
Institution in the country, setup to cater to the long-term finance needs of the industrial sector. Since its inception, IFCI has been a
catalyst in creating a robust industrial base for the country through modernization of Indian industry, export promotion, import
substitution, nurturing sunrise industries etc. through commercially viable and market-friendly initiatives.
In order to continue serving the needs of the Industry and society, IFCI offers the following products broadly categorized into
three segments – Project Finance, Corporate Finance & Structured Finance spreading across industries, services and Agro based
sectors.

Project Finance:
IFCI’s team of professionals with in-depth understanding of the sectoral dynamics, has the ability to provide customized financial
solutions to meet the growing & diversified requirement for different levels of the projects – greenfield projects, brownfield,
diversification and modernisation of existing projects in infrastructure and manufacturing sectors.
The various sectors covered under Project Finance are Power including Renewable energy, Telecommunications, Roads, Oil &
gas, Ports, Airports, Basic Metals, Chemicals, Pharmaceuticals, Electronics, Textiles, Real Estate, Smart Cities & Urban
Infrastructure etc.
Corporate Finance:
IFCI caters to the varied needs of diverse set of customers ranging across small, mid and large corporates. IFCI offers financial
solutions in areas of corporate finance through Balance Sheet Funding, Loan Against Shares, Lease Rental Discounting, Promoter
Funding, Long Term Working Capital requirements, Capital Expenditure and regular Maintenance Capex.
IFCI also offers a Short Term Loan product (tenure upto 1 year) to meet various business requirements including bridge financing
and short term working capital requirements.

Syndication & Advisory

IFCI has taken an initiative to provide customized corporate advisory services and facilitating the financial re-engineering of
various corporate houses and companies. We assimilate the inputs gathered from our vast and rich experience of project appraisal,
documentation, syndication, product design in providing a customized comprehensive end to end financial solution for Corporates.
We further carry out debt and equity syndication and advisory services for our client companies.
In the area of providing customized corporate advisory services, IFCI has been able to secure new assignments relating to
financial/investment appraisal, business reengineering and advisory activities.

Structured Products:
IFCI also provides financing solutions to its clients through Structured Debt/Mezzanine products and assists in providing optimal
financing solutions for various requirements such as sponsor financing, acquisition financing, pre-IPO financing and Off-Balance
Sheet Structured Solutions amongst others.
 REDUCTION IN NET NPA’S AND RECOVERY THEREOF
Recovery as % Recovery as
Gross NPA Net NPA Recovery* of Gross NPA % of Net NPA
FY 2017-18 8672 5127 1589 18% 31%
FY 2018-19 8610 4069 2621 30% 64%
FY 2019-20 7775 3496 1892 24% 54%
FY 2020-21 7801 2817 520 7% 18%
 Recovery including Monetisation of Non Core Assets

 Significant provisioning has brought down Net NPA’s to Rs. 2817 Crore.
 Effective and aggressive NPA recoveries and monetisation of Rs. 6622 Crore in last 4 years.
Net NPAs and % of Recovery
5127
4069
2621 3496 2817
1589 1892
31% 64% 54% 520 18%

FY 2017-18 FY 2018-19 FY 2019-20 FY 2020-21

Net NPA Recovery* Recovery as % of Net NPA

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KEY OPERATIONAL & FINANCIAL PARAMETERS
Parameter (Rs. in crore) Mar 2021 Mar 2020

Sanctions 0 158
Disbursements 77 742
Recovery (NPA+Divestment+Sale of Non core assets) 520 1,892

Total Income 1396.92 2264.06

Profit before Impairment 124.40 281.05

Net Profit/ Loss (1957.81) (277.88)

Total Comprehensive Income (1935.68) (317.53)

Net Interest Income (33) 728

Net Worth 2372 4108

4009 6055
Net Stage 3 Assets
(61.87%) (58.82%)

Impairment Allowance on Stage 3 Assets 60.32% 49.05%

Capital to Risk Weighted Assets Ratio (CRAR) -10.80% 13.54%

Debt to Equity Ratio 4.58 3.0

 HIGHLIGHTS OF FINANCIAL RESULTS – IND AS
Particulars Mar-21 Mar-20 Dec-20
FY 20-21 FY 19-20
(₹ crore) Q4FY21 Q4FY20 Q3FY21
Income from Operations (156.62) 748.89 400.18 1378.00 2243.66
Total Income (146.42) 749.31 400.97 1396.92 2264.06
Finance Costs 267.24 318.82 275.81 1118.97 1416.35
Net Loss on fair value changes - 98.56 - - 275.50
Other Expenses 54.00 120.12 29.22 153.55 291.16
Total Expenses (excl. Impairment) 321.24 537.50 305.03 1272.52 1983.01
Impairment on Financial Instruments 193.91 727.08 979.82 2271.63 421.96

Profit/ (Loss) for the period (661.57) (515.27) (883.88) (2147.23) (140.91)
Net Profit/(Loss) for the period- (A) (848.64) (589.68) (740.17) (1957.81) (277.88)
Other Comprehensive Income – (B) (4.33) 3.00 13.59 22.13 (39.65)

Total Comprehensive Income – (A+B) (852.96) (586.68) (726.59) (1935.68) (317.53)

STEPS TAKEN FOR BALANCE SHEET QUALITY ENHANCEMENT

Enhanced qualitative Appraisal, Due-Diligence & Integrated Risk Management

Enhancing proportion of short and medium term loans in fresh business

Renewed focus on financing to manufacturing & service sector

Focus on financing brownfield projects & operating units and sunrise sectors

Higher threshold credit rating for mobilizing fresh business

Targeting more corporate advisory and fee based business

Fee based Management Services to Govt. of India Schemes of Electronics & other sectors
 INITIATIVES TAKEN BY MANAGEMENT
Integrated Risk Management System IMPLEMENTED

CONTINUOUS
Enhancement of Appraisal Skills & Capacity building PROCESS
OPERATIONAL

Integrated IFCI Group Business Development IMPLEMENTED

Cost Reduction – Operational & Non-operational IMPLEMENTED

Revisiting policies of Lending, R&T, HR and other in line with present market conditions IMPLEMENTED

Corporate Planning & Policy Initiatives IMPLEMENTED

CONTINUOUS
Strategic Divestments & Monetisation of non-core Assets
STRATEGI

PROCESS

CONTINUOUS
Effective Corporate Communications for Brand & Image building with stakeholders PROCESS
C

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